The Auditor-General (AG) has urged Minister of Sport, Arts and Culture, Gayton McKenzie to fast-track the forensic investigation into the Downtown Music Hub (DTMH) and to act swiftly on its findings.
The decision stems from a series of allegations of financial mismanagement and non-accountability by the hub’s previous management. Earlier this year, Sunday World reported that unpaid employees had taken the institution to the Commission of Conciliation, Mediation and Arbitration, leading McKenzie to cut its funding and shut it down. The sheriff has since attached DTMH assets.
The AG’s directive, presented in Parliament on October 14, found that funds allocated to DTMH were not used for their intended purpose.
AG findings on misuse of funds
“We reviewed the utilisation of funds transferred to the Downtown Music Hub for the period covering 2022-23 to 2024-25. And we found the following: the funding allocated to [DTMH] was not aligned with the department’s funding approval guidelines and established protocols. As a result, they were allocated more funding than what was applicable,” the report reads in part.
“The hub was funded as if it was operating optimally while it was experiencing financial challenges. Funds allocated by the department were not utilised for their intended purpose. Some funds were used for operational expenditures, including the settlement of long-outstanding debts, interest, and penalties. This is because there were no specific performance objectives included in the MOA. The expenditure reports for 2023-24 and 2022-23 could not be fully reconciled to the grant provided.”
The AG further noted that weak oversight and misuse of public funds prompted DSAC to suspend financial support.
“An investigation was undertaken in 2022, but it was never finalised. Thus necessitating another investigation. The Downtown Music Hub is not self-sustainable. The funding was used for operational reasons instead of supporting performance objectives. And the minister should expedite the investigation. The accounting officer should ensure implementation of the recommendations thereof,” reads the report.
CEO denies misuse, cites underfunding
DTMH CEO Mpume Mabuza told Sunday World that the hub has been transparent about its financial challenges.
“We’ve been transparent about our financial sustainability concerns. Particularly regarding the urgent need for renovations to the hub’s 90-year-old building. Additionally, DTMH has developed a comprehensive business plan aimed at restoring our infrastructure. Also establishing a commercial division within the Downtown Music Precinct. This project has received strong support from the City of Johannesburg, Gauteng Tourism, Joburg Tourism, and other partners.”
Mabuza said that funding received between 2020 and 2025 was used mainly for staff salaries and essential services.
“While DTMH has consistently requested a minimum annual allocation of R20-million from DSAC, the actual funding received was significantly less. Only R6-million per year from 2020/21 to 2023/24 and R4-million for 2024/25. We have repeatedly communicated to the department that this level of funding has been insufficient to cover our operational costs.”
Financial obligations, expenses
She added that the hub often relied on loans to pay debts, including SARS obligations. And it struggled to fill key vacancies. DTMH also sought alternative funding sources.
“In 2023, we secured grant funding from BASA for our pilot Music Business Incubator Program. And from the Presidential Employment Stimulus Fund to support our Music-in-Schools program, which employed around 180 local musicians.”
However, lack of property ownership has forced DTMH to spend its limited funds on maintenance.
“In 2023 alone, we spent over R500,000 on essential repairs, including roofing, plumbing, and electrical work. The agreement also detailed reporting requirements. And we’ve been diligent in meeting those obligations.”
She said audits for 2020/21 through 2023/24 were completed and submitted.
“We have put in place strict measures to uphold ethical standards. And any misuse of DTMH resources has been dealt with according to policy and relevant legislation.”
Mabuza expressed dismay over McKenzie’s decision to end funding.
“DTMH has consistently received annual grant funding from DSAC since 2008. Therefore, we had a reasonable expectation of continued support. The sudden termination of funding in 2025 came as a major shock to both our board and staff.”
Questions were sent to the DSAC, but no response had been received at the time of publishing.
